India's November industrial production growth slumps to 0.5 percent in November

New Delhi, Jan 11 (IBNS): India's factory production decelerated in November and marked a rise of only 0.5 percent, official data released on Friday said.

It is the slowest rate of growth recorded since June 2017.

"The Quick Estimates of Index of Industrial Production (IIP) with base 2011-12 for the month of November 2018 stands at 126.4, which is 0.5 percent higher as compared to the level in the month of November 2017. The cumulative growth for the period April-November 2018 over the corresponding period of the previous year stands at 5.0 percent," read a government statement released.

The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the month of November 2018 stand at 110.6, 127.2 and 147.2 respectively, with the corresponding growth rates of 2.7 percent, (-) 0.4 percent and 5.1 percent as compared to November 2017.

The cumulative growth in these three sectors during April-November 2018 over the corresponding period of 2017 has been 3.7 percent, 5.0 percent and 6.6 percent respectively.

In terms of industries, ten out of the twenty three industry groups (as per 2-digit NIC-2008) in the manufacturing sector have shown positive growth during the month of November 2018 as compared to the corresponding month of the previous year.

The industry group ‘Manufacture of wearing apparel’ has shown the highest positive growth of 22.1 percent followed by 7.6 percent in ‘Manufacture of wood and products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials’ and 7.4 percent in ‘Manufacture of other transport equipment’. On the other hand, the industry group ‘Manufacture of fabricated metal products, except machinery and equipment’ has shown the highest negative growth of (-) 13.4 percent followed by (-) 9.6 percent in ‘Manufacture of electrical equipment’ and (-) 7.3 in ‘Other manufacturing’.

As per Use-based classification, the growth rates in November 2018 over November 2017 are 3.2 percent in Primary goods, (-) 3.4 percent in Capital goods, (-) 4.5 percent in Intermediate goods and 5.0 percent in Infrastructure/ Construction Goods (Statement III).

The Consumer durables and Consumer non-durables have recorded growth of (-) 0.9 percent and (-) 0.6 percent respectively.

Mustafa Nadeem, CEO, Epic Research, reacted to the development and said: "The Industrial output crashed to 0.5% from 8.1% with a negative drop of -7.6%. The Cumulative industrial output was seen at 5% vs 5.6% while the Manufacturing output also dented to -0.4%."

"This came in post-market and we may further see its initial reaction on Monday morning. A rise in volatility is already due and this very well may be the trigger. Traders need to watch lower levels very carefully which is placed at 10700. Once taken out on the closing basis may drag us to 10520 - 10400," Nadeem said.

"In next week we will be accompanied with WPI numbers which are expected to be muted with WPI Inflation Y/Y is expected around 4.40% while Trade deficit number is also awaited. It will be important as Govt.'s aim to bring it down. It is expected to be around 14.98B (USD)," Nadeem said.

India's November industrial production growth slumps to 0.5 percent in November